Debt Resolve Revenues Fall 80% as Four Major Clients Walk

Debt Resolve Inc. today reported first quarter revenues of $233,148, down nearly 80 percent from $1.1 million in the same period a year ago, primarily due to "the loss of four major clients during 2007" from its collection agency subsidiary First Performance.

Debt Resolve (AMEX: DRV) operates First Performance and is a provider of an online debt collection system to credit card issuers, collection agencies, collection law firms and debt buyers. It earns a percent of debt collected or fee for the use of its system.

In the first quarter of 2008, Debt Resolve saw revenues of $148,970 from First Performance, and $84,178 from its online system. In comparison, in the first quarter of 2007, the company saw revenues of $1.1 million from First Performance and $20,620 from its online system. Debt Resolve announced the results in a filing with the U.S. Securities and Exchange Commission.

On March 31, Debt Resolve entered into a private placement agreement with Harmonie International LLC to sell more than 2.9 million shares of stock for $7 million in cash. Harmonie is to receive a 10-year warrant to purchase 3.7 million shares of Debt Resolve at an exercise price of $2.36 per share.

On May 16, Harmonie asked for an extension until May 30 to complete the funding for the deal, Debt Resolve reported in its quarterly. 
 
Debt Resolve shares were trading at $1.73 mid morning, down more than 13 percent.

For the year 2007, Debt Resolve reported a net loss of $12.6 million, on revenues of $2.8 million as it received placements in client accounts of more than $4 billion in face value debt, "Debt Resolve Cuts Its Losses as Revenues Explode," April 16).